Why Peter Shumlin will save Vermont Yankee

The high cost of closing the reactor will be keenly felt in the state’s economy

Vermont Governor-elect Peter Shumlin (right) must have woken up in a cold sweat in the middle of the night over the future of the Vermont Yankee nuclear reactor.

In troubled sleep, the newly elected top state official might have seen the size of the electric bill Vermonters would be paying for replacement fossil power to keep their homes and businesses warm during the state’s long and frigid winters. Like Scrooge in Dickens’ ‘Christmas Tale,” Shumlin might have seen the ghost of future utility bills haunting his political legacy.

Also, he might have seen major employers, like IBM with 6,000 workers, leaving the state and heading for places like Vietnam to make computer chips. The reason is that IBM, and other major employers, won’t be able to compete globally with the loss of $0.06/KwHr electricity and its replacement at double or more of that cost. He will realize the shockingly high price price of replacement power, and its consequences, would be blamed on him.

Also, a closed reactor will become a political and visual eyesore for the rest of his term of office and much longer. The spent fuel isn’t going anywhere and decommissioning could take a decade or longer to complete.

Shumlin’s political opponents will have a field day with both issues.

Shumlin’s wake up call

Right after waking up, Shumlin might have immediately made a ‘wake up call’ to his transition team and ordered them to get him a tour of the plant to begin the process of making peace with the future of the reactor. It appears that’s exactly what happened

Vermont Governor Elect Peter Shumlin visited the Vermont Yankee nuclear power plant this week. He got a tour of the facility and during the visit emphasized the need for Entergy, the utility that owns and operates the reactor, to restart pumping and treating groundwater for radioactive tritium. OK, that’s all well and good even though the tritium isn’t a public health threat to anyone off-site.

The visit raises the significant question of whether Shumlin is softening his tough stance that the plant should not be relicensed by the NRC for another 20 years. On the surface, it appears the answer is no because in an interview with a local TV station, he repeated his call for it to be "retired" in 2012. That's when the current license runs out.

Politics drives purpose

There are political reasons why Shumlin might change his mind.

The first is that closing the plant will subject Vermont rate payers to having to buy replacement, fossil-based power at rates as high as $0.15/KwHr. This is two-and-a-half times the rate they pay now for electricity from Vermont Yankee, which supplies about one third of the electricity used in Vermont. That’s a huge hit on voter pocketbooks and its effects will be felt across the state.

The second reason is that closing the plant in 2012 insures that it will become a highly visible political eyesore for Shumlin. It will take two years to move the plant from being actively operated to generate electricity to be ready to begin D&D. It will take another decade to decommission the plant. The spent fuel from the plant will remain at the site for up to 60 years.

He can call for “immediate” decommissioning, but it won’t matter or make a difference. There is nothing the governor can do to change that schedule since the NRC is in charge of this process. The agency will follow its own regulations which lay out a process for safely permanently shutting down a nuclear reactor.

First term recall election?

Shumlin's political opponents won't hesitate to tag him with the responsibility for heart-stopping increases in the cost of electricity and that he's turned an economic asset which supports 700 jobs into a high security spent fuel respository that supports a dozen jobs.

They will also tag him with the loss of thousands of other jobs in a small state as its biggest employers exit in search of cheap electricity.

A first-term recall election isn’t outside of the realm of political feasibility if things get really bad with brownouts on top of higher electric bills. All this will happen on his watch if he succeeds in closing the plant in 2012. That’s just two years from now into a four-year term.

How much power does Shumlin really have?

The decision to close the reactor isn't Vermont's to make. The NRC issues the license, not the state legislature. Entergy spokesman Larry Smith said as much following Shumlin's tour of the plant.

"We are moving forward with our plans at the federal level to get a new license from the Nuclear Regulatory Commission and to seek approval from the Vermont Legislature and a certificate of public good from the Public Service Board," Smith said.

That outcome might be based on some changes at Vermont Yankee that even an anti-nuclear arch druid like Shumlin might find to be an attractive alternative to sky high electricity rates and ignominiously losing his job over them.

What price license renewal?

According to WCAX TYV, a new owner at the plant and a new, low-price power agreement might stop lawmakers from pulling the plug. Entergy has confirmed it is talking with other utilities about selling the reactor and transferring its license. A deal would be contingent on settling issues with the Vermont legislature.

A politically savvy source in Vermont told this blog in November Shumlin “gets it” that political reality will require him to make a deal over the future of Vermont Yankee. The only question now is how he gets there and what the deal looks like to voters in terms of its impact on their checkbooks.

Update 12/19/10

Several people have sent comments suggesting the if the current or future owner(s) of Vermont Yankee made a substantial contribution to the Vermont Clean Energy Development Fund, on order of several $millions, that would appease Gov-elect Shumlin.

This sounds at first like a bribe. In in Germany Chancellor Angela Merkel imposed a 50% profits tax on the nation's 17 operating nuclear reactors to generate about $2.3 billion annually for renewable technologies.

This is a proposal for piracy operating under the delusion that solar energy makes any sense in Vermont, which has the same lousy winters as Germany in terms of days of sunshine.

A guest says:

Of course I expect this Democrat to do whatever he wants once in office. It's what they do. Consider the campaign promises of Barack Obama. The war that he vowed to end has been redoubled; repressive policies that would have embarrassed even Dick Cheney were put into place.

Here's the background: Shumlin sold out to Monsanto years ago, 'nuking' any bills in the senate that would have gone against GMO trafficking. Even honest GMO labelling of food, he killed the bill, saying that his party couldn't afford to lose the money from Big Ag. That's corruption.

The Vermont Legislature has consistently run Vermont on behalf of corporations that suck us dry of our natural resources. Then they gave away Vermont's dams to TransCanada, which uses them to produce power for Massachusetts and Vermont doesn't make a penny on the deal.

This is the milieu in which Entergy operates: paying nothing to the public for their use of surface water for cooling, paying nothing for stockpiling nuclear waste in a floodplain, having no real business plan and not financially securing the cleanup fund.

The electricity is cheap, because Entergy doesn't have to pay the real cost of doing business. The energy market is so distorted because of government intervention and forced public subsidy of Entergy & Transcanada, that Vermonters simply don't know the real cost of electricity. The columnist is right, a rude wake-up is coming.

Finally, these Democrat/Republican machine politicians, after their give-aways to corporations of the public trust, estimated by UVM at $12. BILLION per year, have the gall to claim that there's a 'budget crisis'. There is no crisis other than a crisis of accountability.

A guest says:

The plant is old. It leaks radioactive waste into groundwater. Its right next to a river. No one wants radioactive leaks in their water supply.

A way forward is to ween ourselves off of toxic energy. We live in the 21st century. Because all other states are destroying their agriculture land, Vermont will increasingly become a more agriculture export based state. Now NO ONE wants nuclear waste based tomatos.

A nuclear energy chain is still heavily based on oil. It takes oil to move fuel rods, to move highly dangerous radioactive toxic waste in 10 ton oil-produced lead and concrete casings to NOT-IN-MY BACKYARD, aka yucca mountain.

Peak oil is near. All your economic justifications are based on a system of inifinite oil. But, in the long term, a non-nuclear, non-oil based and most importantly, renewable based energy supply is the way to go. Thousands of jobs will be created to get renewables into place.

I agree, anonymous. In the many months I've tried to participate on TEC, I've never heard a solution offered.

Dan, if the nuclear plant is wearing out, then fix it. Pretty simple. Don't resort to the same name calling we hear from deniers.

Geoff, you need to learn the basic physics concept of the harmonic oscillator. A spring is approximated to have a restoring force proportional to displacement from some minima. The calculus solution simply provides a sine wave oscillation over that parabolic curve. So we are stuck in an oil oscillation. The economy improves, oil prices rise and we are pulled back. The economy falters, and people like you tell us how much oil we have and how cheap it is. Over and over, back and forth.

As for lowly agriculture, I agree with Robert Rapier's idea that the midwest should keep ethanol. And keep the food and export cash, too. The rest of you don't produce much we can't get elsewhere. And we have a new Ag. Commissioner in Minnesota. I'm hopeful new biofuels will see a new emphasis. Maybe we can export that, too.

Wouldn't the same concerns also apply to the fabrication and transportation of wind turbine towers, nacelles and blades, or large-scale solar installations? They are as much the products of a high-energy civilization as the components of a nuclear power plant are, and they can't exactly be hauled by oxcart. It also sounds like you imagine that one day soon, all the oil in the world will simply stop flowing. I don't know any serious adherents of the Peak Oil view who think that will happen.

I guess we should all live in caves? This is nonsense based on some romantic notion of going back to the land. Agriculture represents just 3% of economic activity in the state. And Vermont Yankee does not contaminate your tomatoes or those of anyone else.

Shulman is clever, articulate, will find a way out of the box he is in.

A good long-term power offer from Entergy similar to that from Hydro-Quebec, plus more money (about $6,000,000/yr) for the Clean Energy Development Fund, CEDF, an incentives fund for renewables vendors, developers and financiers; diligent cleanup; more direct oversight by the Vermont government (more openness by Entergy) will probably do the trick.

VY direct employment is about 650. Direct payroll with benefits is about $65 million/yr. The economic multiplier effect is about 3, meaning many businesses in a 25-mile radius from VY will be under significant ADDITIONAL pressure and will have to cut staffs (estimates are more than 1,000).

This 300 square-mile area will become an economic backwater, just as Windsor, Vermont, when companies moved out; Windsor has not recovered after 30 years. Instead of being a significant benefit to the budgets of Massachusetts and Vermont, the VY area will become a significant burden for many years. Vermont tax collections will be less by many millions of dollars and payments for unemployment benefits, etc., will be up.

Current ISO-NE grid SPOT prices are about $0.055/kWh, summer peak SPOT prices, which occur during about 100 hours of the summer, are about $0.12 to $0.16/kWh; much lower than the $0.12 to $0.30/kWh prices of renewables that Shulman is so fond of.

Utilities buy under long term contracts, buy very little at spot prices. Closing VY will have minimal impact on grid prices as there is ample low-cost supply due to the Great Recession which will be with us for some years.

The takeover by Republicans of the US House means Vermont's delegation will be less effective getting federal goodies to close Vermont's budget gaps.

Governors in Vermont serve 2-yr terms; Shulman's term ends in 2012. The last thing Shulman needs is for Vermont's unemployment rate to start rising again making his $120 million budget deficits harder to close. It would be even harder to keep unrealistic campaign promises.

The trouble is, this was always in the hands of Entergy and nobody else. The future of VY is in the hands of Entergy. Sadly there has been no change with how Entergy treats the community...how the community wants to participate in the operation of that plant.

If VY was serious about a future...we would have come to a resolution with a community oversight panel and acess to information within the plant.